This blog posts answers to questions given to us by ministers and others serving in Christian ministries advancing the gospel of Jesus Christ. It also discusses other financial topics that those in gospel ministries face. We trust the information provided can be helpful to you.

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Compensation as a "Volunteer"

An individual receives donations from various individuals through an organization that sponsors his volunteer service abroad. He also receives a monthly "gift" from the organization for volunteering.

Do either of these income streams require the issuance of Form 1099-MISC?

Answer:

For
the donations receive in connection with the volunteer work, the Form 1099-MISC
does not need to be issued by the sponsoring organization if all of the funds are spent for expenses related
to the volunteer work and documented accordingly to that organization. According Internal Revenue Service Publication 526, qualifying expenses must be those:

Directly connected with the services provided, and

Only incurred because of the
services you gave.

Travel expenses of volunteers:

Travel expenses necessarily
incurred while you are away from home
performing services for a charitable organization
only if there is no significant element of personal
pleasure, recreation, or vacation in the
travel,

Air, rail, and bus transportation,

Out of ­pocket expenses for your car (although most volunteers simply use the charitable mileage rate of $.14 per mile (2016)),

Taxi fares or other costs of transportation
between the airport or station and your hotel,

Lodging costs, and

The cost of meals.

Qualifying expenses do not include:

The value of the service you provided

Personal, living, or family expenses.

If the monthly “gift” actually exceeds qualifying expenses, then it represents compensation for services
performed. It should be reported either on an independent contractor's Form 1099-MISC if it exceeds $600 in the tax year or on an employee's Form W-2.
See past MinistryCPA post regarding charitable travel:

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Disclaimer:

This information is provided as a service of MinistryCPA.org to ministers and Christian ministries. Please contact me or your personal professional advisor to determine how this information may apply to your own situation.